MDU
MDU Resources Group, Inc.
$20.98
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 29.8% below fair value
You pay
$20.98
Bear
$23.91
Fair
$29.89
Bull
$35.87
Bear
$23.91
+14.0%
$1.81 × 15x P/E
Fair
$29.89
+42.5%
$1.81 × 18x P/E
Bull
$35.87
+70.9%
$1.81 × 22x P/E
Key Value Driver
Normalized P/E multiple (18x base case)
Implied Market Multiple
11.6x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $21.00 from 18 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $29.89 per share.
Warnings
The company's reported profits differ from official accounting profits by 95%. Check what costs are being left out of the adjusted number.
Wall Street's average price target is $21.00 (from 18 analysts). Our estimate is 56% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples